Write-down of shares of an affiliated company due to the subsidiary's failure to achieve its business plan
First written in FY2019. 1 of 2 entries say "Materialised", first in FY2019. Latest entry: FY2021.
The whole theme swung hardest in 2024: 8 of 13 companies on the "Worse" side.
2 other companies' latest entry also says "Other".
- FY2021Goodwill impairment risk becomes more specificAnnual report
「株式会社ミツワ商会 has operated an automotive products sales business in Hokkaido for many years and expects expanded sales and excess earnings power from synergies through more effective use of its know-how and management resources. In assessing goodwill impairment, we estimate operating profit and undiscounted future cash flows based on reasonable information available at the time. If changes in the conditions or assumptions underlying these estimates arise due to deterioration in the business environment or other factors, reducing excess earnings power, goodwill impairment may become necessary and could have a material impact on the amount of goodwill reported in the consolidated financial statements for the following consolidated fiscal year.」
Regarding the previously identified risks related to the subsidiary's business plan and earnings power, it specifies the impairment assessment for ¥62.430 million of goodwill at 株式会社ミツワ商会, including checking for downside deviations in operating profit and undiscounted future cash flows, and the possibility of impairment if excess earnings power declines. - FY2019MaterialisedAnnual report
「The shares we hold in the subsidiary were impaired because progress against its business plan has not been in line with the plan.」
It states that an impairment loss on investments in affiliates of ¥56.831 million was recorded because the subsidiary's business plan was not progressing as planned.